The Stock Exchange of Hong Kong Limited (the Exchange), a wholly-owned subsidiary of Hong Kong Exchanges and Clearing Limited (HKEx), today (Friday) published its first report on the findings and recommendations from a review of all listed issuers' annual reports (excluding collective investment schemes listed under Main Board Chapter 20)¹.  The review focused on issuers' compliance with the Listing Rules and their disclosure of material events and developments.

Areas covered in the review included:

• Impairment of intangible assets arising from material acquisitions;
• Results of performance guarantees on acquisitions;
• Connected transactions;
• Significant changes to financial position;
• Newly listed issuers;
• Periodic disclosure of mining or petroleum assets under Main Board Chapter 18 / GEM^* Chapter 18A; and
• Disclosure by investment companies listed under Main Board Chapter 21.

This review is separate from the Exchange's Financial Statements Review Programme², which reviews the periodic financial reports published by issuers for compliance with both accounting standards and the Listing Rules' disclosure requirements.

In the review, the Exchange identified areas where disclosure by issuers can be improved.  It also identified areas of minor non-compliances which appeared to be common, and a few cases involving potentially material breaches of the Rules.  Appropriate actions have been taken against these breaches, depending on their nature and materiality of the non-compliance.

"We were pleased to find a large majority of issuers comply with the Listing Rules' requirements based on our review of disclosure in annual reports," said David Graham, HKEx’s Chief Regulatory Officer and Head of Listing.  "To promote transparency and high quality disclosure, we encourage issuers to go beyond the required minimum standard and to disclose additional information that investors would find helpful."

Issuers should note the observations discussed in the report and consider them when preparing their annual reports.  The Exchange will continue the review programme, focusing on different thematic areas in future.

The report is available under the "Rules & Regulations - Rules and Guidance on Listing Matters - Guidance Materials - Listed issuers' general disclosure obligation" section of the HKEx website. 

Ends